According to the plaintiff, the defendants violated, inter alia, the provisions of the Securities Law, 5728-1968 (hereinafter: the Securities Law), the Securities Regulations (Periodic and Immediate Reports, 5730-1970 (hereinafter: the Reporting Regulations)), including the provisions of the Eleventh Addendum to the Reporting Regulations relating to the reporting of corporations engaged in the field of oil exploration (hereinafter: the Eleventh Addendum). It was argued that in these circumstances, the plaintiff is entitled to the full return of his investment.
- Previous, parallel class proceedings and the plaintiff's announcement of his intention to leave the class
- The plaintiff's personal claim is not the only proceeding that was filed in respect of Shemen's reports in relation to the "Yam 3" drilling. The filing of the personal lawsuit was preceded by class proceedings, which also centered on allegations of false reports on Shemen's part, mainly because it did not include in its reports the rock data that were clarified in the tests it conducted prior to their publication. Since the class proceedings occupied a significant part of the plaintiff's arguments, and even had an impact on the manner in which the proceeding before me was conducted, I will address the matter briefly.
- The first class proceeding in relation to the events that are the subject of this case was filed on October 17, 2013 by the plaintiff's attorney here, Adv. Yogev Halfon. It was claimed that the defendants published false statements regarding oil signs in the "Yam 3" drilling, presented an optimistic picture of the situation by not disclosing details relating to the rock data that were known to them, as well as by means of over-reporting, and thus misled investors. On October 26, 2016, the Tel Aviv District Court (the Honorable Judge D. Keret-Meir) accepted the request for approval. The application for approval was approved in relation to the group, of which the plaintiff is not a member, which includes the holders of Series 4 options who exercised them on the dates specified in the application. It was also determined that the group's attorney, Adv. Halfon, is not suitable to serve as its representative (Class Action 38842-10-13, [Nevo] below: Halfon Request andClaim from the Option Exercisers respectively).
A motion for a rehearing was filed on the decision to approve the Halfon application before a panel of the Economic Department in this court in accordance with the provisions of section 41(e) of the Courts Law, 5744-1984. As part of the rehearing, a settlement was formulated that received the court's approval (Civil Case (Tel Aviv District) 64087-01-17 Oil and Gas Resources Oil in a Tax Appeal v. Yogev Halfon [Nevo] (January 13, 2020) and the approval of the settlement in the claim of the option exercisers, respectively). An appeal was filed against the approval of the settlement which was rejected (Civil Appeal 1582-20 Adv. Yogev Halfon v. Oil and Gas Resources Oil and Gas Resources in Tax Appeal [Nevo] (December 29, 2021) (hereinafter: Civil Appeal 1582/20 in the Halfon case) [Nevo]).
- On August 6, 2015, another motion to certify a class action was filed, in which the group to which the group belonged was requested to be represented by those who purchased Shemen shares after the September 8, 2013 report and held them until October 14, 2013, except for those who purchased shares as part of a private share offering, and with the exception of those who exercised Shemen options on September 22, 2013 (Class Action 13948-08-15, hereinafter: Buyers' Request in the Market). On July 24, 2017, another application was filed, requesting representation of a group to which it belonged to those who purchased shares in private offerings on September 22, 2013 and September 23, 2013 and held shares until October 14, 2013 onwards (Class Action (Tel Aviv District) 54160-07-17; hereinafter: Buyers' Request for Private Bids). The two requests will be referred to below, for the sake of convenience: Shares Buyers' Applications.
The matter of the two applications for approval mentioned above also revolved around Shemen's reports, and it was claimed that they were misleading reports because they did not detail all the information that was in the possession of the defendants, and in particular the pore data that they had prior to the decision to carry out production tests.